Best and Worst – Our SPECIAL REPORT on frequent travel programs.

Best and Worst – Our SPECIAL REPORT on frequent travel programs.

Consider the dear old frequent traveler program. With this great perk you’re guaranteed an immediate, essentially unbeatable return on the time you spend traveling (upgrades anyone?), especially if your company is footing the travel bill. What’s more, the miles and points sit with subtle changes until you decide to use them — an act of true largesse from airlines, hotels, car rental and credit card companies.

Yet most frequent traveler programs are a long way from perfect. All too often members are stuck with restrictive award usage policies, tightwad fees for express redemption and, worst of all, changes that come without much warning (Want to bet that National Car Rental’s Emerald Club heads that list?).

If you don’t think it matters much which program you choose, think again. Let’s say you earned 40,000 miles in United’s Mileage Plus program and left it there for three years — your ability to use those miles without fear of devaluation is pretty good. But, if your miles had been tucked away in the US Airways’ Dividend Miles program for the same amount of time, you would be facing a mileage devaluation problem because of partner changes and a non-expansive list of alliance partners.

To help identify the best and worst features of these programs, we analyzed the most popular programs and we sought input from members who are active in these programs. Then we divided the programs into four broad groups — frequent flyer programs, frequent guest programs, credit card programs and special programs — and applied a two-part rating system to compare the performance of each program against its peers over the past five years.

The first rating was designed to measure consistency. The programs were ranked by the number of rolling 12-month negative changes made — and by the severity of those changes. The second rating gauged each program’s rolling three-month positive changes. We looked at how often the programs provided plus benefits in this three-month period and how rewarding those changes were. Our system penalizes programs with frequent and large short-term changes, which aren’t seen as positives for the members.

The percentile rankings in the tables — 1 is best, 100 is worst — are designed to help you decide what’s most important to you — benefits or features. And remember, you needn’t feel compelled to choose your frequent traveler program just for the sake of getting a free trip to Hawaii. Consider which combination of benefits and features offers you the greatest value, then allocate your travel and other mileage- and points-earning choices into the program(s) that deliver what you really want.

Read on to discover the best and worst of frequent traveler programs.

Alaska Airlines Mileage Plan
Best program feature: A wide variety of partners with which members can earn and burn miles is the defining characterstic of the Mileage Plan program. And we’re not just talking airline partners here. Mileage Plan’s credit card offerings are above average in total benefits. For now at least, the program’s anti-alliance stance seems to be working well.

Worst program feature: The move in 2001 to raise select mileage levels “to be more competitive.” With this change, the Mileage Plan awards program became average, and we moved it from a “Buy” rating to a “Hold.”

Negative/Positive Change Rating: 63/23
Benefits/Features Rating: 28/17

America West Airlines FlightFund
Best program feature: FlightFund has a few surprisingly good features, but its best program feature by far has to be the year-round domestic award for 20,000 miles. While not often given the credit it deserves, we’ll tell you right now — give FlightFund another look.

Worst program feature: The America West airline sometimes gets in the way of a very good FlightFund frequent flyer program. In the last few years the airline has had its scrapes with passengers and it doesn’t help when a major business magazine refers to America West as the worst airline in America. But that’s for another day.

Negative/Positive Change Rating: 17/3
Benefits/Features Rating: 21/18

Continental Airlines OnePass
Best program feature: For the past several years, OnePass has made its reputation by providing unlimited upgrades to the higher elite members on a space available basis. This strategy has served OnePass well and has kept its most important asset, the high flying, high faring elite flyers, in tow.

Worst program feature: Try as we might, we couldn’t decide on just one worst OnePass feature. It came down to a tie between the convoluted nature of the BusinessFirst award (no confirmation until 30 days prior and restricted fares from which you can upgrade unless using a free award) and the requirement of a Saturday night stay over for basic and off-peak awards. If our information that they will drop the off-peak awards is true, then maybe the worst feature of this program will be those calling the shots.

Negative/Positive Change Rating: 61/18
Benefits/Features Rating: 12/21

Delta Air Lines SkyMiles
Best program feature: The Hawaii award at only 30,000 miles is one of the single best values anywhere in the world. SkyMiles’ Platinum Medallion program also deserves attention for the inclusion of a Delta Crowne Room membership, which interestingly enough ranks as a better feature than the unlimited upgrade policy.

Worst program feature: Upgrades not available from L and U fares. Delta asserts that this restriction allows its agents to say “yes” more often when members request an upgrade. But a quick check of the WebFlyer Upgrade Index tells us that SkyMiles is aggregating an upgrade percentage of 59%. American’s current upgrade rate is some 62% and United reigns in at 67%. In fact, 100% of the SkyMiles member we polled noted this as the worst feature.

Negative/Positive Change Rating: 29/5
Benefits/Features Rating: 15/19

Northwest Airlines WorldPerks
Best program feature: Like their alliance counterpoint, Continental OnePass, WorldPerks can be heralded for its unlimited upgrades for elite members. Though commonly offered on a standby basis, Northwest delivers on upgrade request a full 87% of the time according to the WebFlyer Upgrade Index — leading all major carriers in this all-so-important category.

Worst program feature: As we were trying to pinpoint the features that prevent this program from really taking off, the WorldPerks “passenger” spoke up, and they spoke loudly. The worst feature of the WorldPerks program isn’t the inability to earn miles on CyberFares and it’s not that segments don’t count toward elite status. No, the absolute worst feature of the WorldPerks program, as stressed repeatedly by its members, is the rest of the airline. The situation is clearly a love-hate relationship, with members loving the program but hating the airline.

Negative/Positive Change Rating: 23/3
Benefits/Features Rating: 12/21

Southwest Airlines Rapid Rewards
Best program feature: There’s not one single feature of this program that stands out — there are three of them. 1) Double credit for Internet bookings — if you don’t use many partners this translates into a 50% reduction in the award chart, 2) No capacity controls for award redemption — for all that other airlines spew about the need for capacity controls, Southwest makes money and makes its members happy. 3) Members can use half an award credit for one-way travel. Granted, this is something that other programs have offered from time-to-time, but Rapid Rewards is committed to it.

Worst program feature: Three important words — location, location and expiration. We rarely, if ever, complain about this program because it delivers exactly what it promises. Our only consistent complaint is the program’s failure to offer top-draw award choices, such as Hawaii or any international destination. We long for an exotic choice for our credits. The final word is, of course, expiration. When frequent flyers talk about the heavy handed nature of the former days of American and United expiring miles, they often forget that Rapid Rewards invented the concept. The 12-month expiration of earned awards is enough to keep many frequent travelers away from Southwest.

Negative/Positive Change Rating: 14/6
Benefits/Features Rating: 50/50

Of course, each of these programs contain much more than a single best and worst feature. To get an even better idea of what makes some programs special, and relegates others to the second and third tiers, we decided to take a close look at some of the intangibles. All of the features that we’ve highlighted below were selected with an emphasis on member value. You may be surprised by some of our comments.

Best Idea at the Time
Off-peak awards. Years ago, several frequent flyer programs elected to try and “move award share” within their programs by introducing reduced mileage off-peak awards. This seemed like a great idea, since most award redemption was being channeled into the summer months. The hope was that, by offering lower award levels outside these peak months, members would change their award booking plans. Well, truth be told, people still want to go to Orlando in June and fewer miles isn’t going to convince them otherwise. This attempt at better award redemption management is likely to be proven a failure.

Worst Idea at the Time
Alaska Airlines Mileage Plan gets our nod here. When trying to explain the rationale for adjusting much of its award chart upwards in 2001, Mileage Plan labeled it an effort to make the program more competitive. That’s right, Mileage Plan is raising its rates to become more competitive. It must be more of that “supply side” economics thing.

Best Idea Today
No blackout dates. While we can’t confirm any sure direction in this area, there have been rumors that suggest the industry might soon experience a transformational change in this area. Heck, the hotel industry showed frequent flyer programs a thing or two when they started to offer benefits to make award redemption easier. Sometimes you just have to put down the cash register and the spreadsheets and go with your gut feeling. The time is right.

Worst Idea Today
This may surprise some, but our selection for the worst idea in any frequent traveler program today is extending elite level benefits because of the events of 9/11. Before you throw that brick, please let us explain. Many elites love to collect plastic. By comping elite-level benefits for an additional year, the airlines lost the ability to convince flyers to get back on airplanes again following the recovery in October, November and December. In our mind, this decision wasn’t about the events of 9/11. There was a concern in the industry prior to that September day that members were not going to make their re-qualifications because of a downturn of travel related to declining economic conditions. Rather than convincing us to fly again, the industry convinced us to redeem again and again. And with Gold and Platinum in hand, we took the rest of the year off. Remember, flying is everything when trying to make elite.

Biggest Undiscovered Value
America West FlightFund and Northwest WorldPerks are the Rodney Dangerfields of the frequent flying world — neither can get any respect. Many look at these two airlines and see poster children for bad airlines — we see great frequent flyer programs. The elite-level benefits and overall strategy of both of these programs have tremendous value. For example, FlightFund offers a year-round domestic award for only 20,000 miles and yet it still flies to many of the most popular award destinations in the U.S. And WorldPerks can match the Freddie Award-winning Continental OnePass program feature for feature, and might even surpass OnePass in some areas.

Best Single Undiscovered Value
Ever flown Frontier Airlines? You should. Here’s an airline that is following the course for a low-cost carrier. The best single undiscovered value is Frontier’s systemwide-controlled award of only 15,000 miles. While there are capacity controls attached to this award, Frontier’s Early Returns program is still so new that you’ll likely have no problems redeeming an award, even at this level. Yes Virginia, there is a Santa Claus.

Best Management
With Ed French, Jeff Zidell and a whole host of others leading the way, there is no doubt in our mind that the AAdvantage program has the best overall management team.

Our vote for the best individual manager is Susan Kirkelie, Senior Director of Marketing Programs for the Southwest Rapid Rewards program, who has had an enormous influence on frequent flyer programs, all while working for an airline that rightfully should not have one. More often than not, low-cost airlines say they can’t afford these programs. Yet Rapid Rewards has continued to blossom and the airline still shows a profit — even in the toughest of times. Granted, we would love to get to Hawaii with our credits from Rapid Rewards, but we were never promised a rose garden, just an affordable way to get from point A to point B.

Worst Management
Initially we were thinking of naming the United Mileage Plus management team to this dubious honor because, for the last 6 months, Mileage Plus has been last to react to every initiative in the industry — that is, if the program decided to react at all. But, in the end, we just couldn’t justify this point of view. Truth is, we know and respect many of the leaders at Mileage Plus. They are bright, they are fun and they have the weapons to be one of the best programs around.

So the question then becomes, why is Mileage Plus management doing such a poor job. Right or wrong, we came to the conclusion that the problem lies farther up in the executive ranks at United — thanks in no small part to the infamous Jim Goodwin. Hence, upper management at United Airlines, not Mileage Plus, earns the worst management title. Hey big guys, let’s get moving and give your marketing people the support they need to once again flourish. Now, if we had more space we might have headed for Houston and a visit with OnePass.

Next month we will conclude the Best & Worst with the remaining major airline programs, hotel programs and other programs such as the Hertz and Budget Car Rental programs. Stay tuned.

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